Sean's Debut Portfolio Review

Portfolio as at 19.03.19
This is my first post of my current portfolio on Saul’s board. I have found the process of creating this post highly beneficial, and it has helped me make some further adjustments to my portfolio.
I have a non-US bias in my portfolio, but interestingly, there is little difference in the performance of my US and non-US portfolios over the past three months. Comparing the two portfolios has helped me identify areas to improve / refine each set of investments, and the competitive tension I think will lead to better investment decisions. I am now highly motivated to ensure my Non-US portfolio can keep pace with my current US portfolio. Achieving Saul like returns outside the US is a great challenge and opportunity.

My investments are made via our superannuation trust (retirement fund) and our family trust. I have combined the holdings of these two trusts and have split the portfolio into two. US and non-US holdings. I thought my non-US holdings would be of some interest, and includes names that are not mentioned on this board.

One Non-US name that really jumps out for me as a “Saul stock” is Wisetech Global (WTC : ASX). My holding is simply not where it should be when you look at the quality of the business. I could do a deep dive for those interested.

My approach is to take a more cautious approach to buying and selling, so I tend to change positions less frequently than other posters on this board, but the past 3 months have been an exception, as I have done a bit of a clear out. I have also learnt that I simply have too many holdings, and there are too many for me to follow effectively. I have reduced the number of positions I hold by 10.
This review has helped me identify a few other positions that I will exit in the near term. So, I expect the number of positions to continue to fall.

So here goes:

Current cash position (12.5%)

This is quite high for me, and it was 0% around Christmas, as I went shopping for bargains. It is likely to increase if the market continues on its current upward trajectory, and I take the opportunity to pull a few more weeds. I use cash as a hedge in my portfolio.

US Portfolio

No. 1 – TTD (7.3%)
• Market leader and innovator outside walled gardens
• Top US position due to steep valuation discount in December.
• Sector tailwinds, high margins, high growth.
• Keep an eye on: Walled gardens, disrupters, agencies starting up own platforms, Chinese adventure.

No. 2 – TWLO (6.2%)
• Market leader and innovator
• Developer tailwinds.
• Sector tailwinds, high margins, high growth.
• Keep an eye on: gross margins, customer acquisition costs, changes in growth trajectory.

No.3 – MDB (5.3%)
• Undisputed market leader.
• Accelerating growth, with Atlas now driving faster growth. Crossing the chasm???
• Major transition to NoSQL database in the early stages.
• Keep an eye on competition from AMZN, and GOOGL. Watch for issues with Atlas (reliability/security/onboarding).
• INCREASE POSITION (TARGET WEIGHTING 6-7%)

No.4 – SQ (4.1%)
• Market disrupter, optionality galore.
• Software business is growth driver.
• Keep an eye on competition from “local” incumbents (usually banks), lending / financing risk. Watch for declining growth or issues with onboarding merged companies.

No. 5 – AYX (3.9%)
• Undisputed market leader.
• Continuing strong growth.
• Keep an eye on competition from Tableau or the like.
• INCREASE POSITION (TARGET WEIGHTING 5-6%)

No. 6 – FB (2.7%)
• Leading social media platform.
• Growth slowing, regulatory risks, taxation risks.
• Holding to retain daughter’s interest in investing.
• REDUCE POSITION (TARGET WEIGHTING 1-2%)

No. 7 – NTNX (2.3%)
• Leading product innovator in cloud software.
• Significant sales stumble.
• Keep an eye on competition.
• POSITION UNDER REVIEW FOLLOWING “INVESTOR DAY”

No. 8 – OKTA (1.3%)
• Undisputed market leader in identity / sign-on as a service.
• New product innovations increasing TAM.
• Strong growth.
• Keep an eye on new product adoption, net revenue per customer expansion. Questions regarding size of TAM.
• INCREASE POSITION (TARGET WEIGHTING 4%)

No. 9 – ZS (1.3%)
• Undisputed market leader.
• Accelerating growth, and huge TAM
• Keep an eye on competition. Although competition hindered by legacy products, and fear of market cannibalism.
• INCREASE POSITION (TARGET WEIGHTING 6-7%)

Positions sold since January 1, 2019:
I sought to reduce my “de-worsificiation”, and offloaded all my china themed holdings – simply too much risk there, and sold ANET, NVDA, and PAYC due to slowing growth. I also reduced NTNX, and will review the remained of my NTNX holdings over the coming weeks.
• BAIDU
JD.com
• NVDA
• ANET
• PAYC
• TCEHY
• NTNX (35% of holdings)

Positions acquired since January 1, 2019. Positions I added to include:
• NTNX (pre report fail)
• TWLO
• SQ
• APX – new position
• OKTA – new position

Percentage of US stocks in Portfolio = 34.4%
US Portfolio Return since January 1, 2019 = 36.4% (includes currency loss -0.71%)

Non- US portfolio
Appen -APX (ASX) – (7.4%)
• AI Data feeder.
• 100% annual profit and revenue growth
• Consistently beats guidance.
• Establishing top dog status through strategic acquisitions (competitive threats)
• Threats – Watch out for AI disruption to service. Look out for top customers DIYing (akin to UBER and twilio).

Altium -ALU (ASX) – (6.7%)
• Chip design software company.
• Top dog / market leader
• IoT is a huge tailwind for the company.
• Strong cashflow.
• Revenue growth of 24%, but net profit growth of 58% due to operational leverage. EBITDA Margin expansion at about 10-20% pa.

Xero – XRO (ASX) – (6.3%)
• Leading SAAS accounting platform.
• Pure cloud play (unlike INTUIT).
• Revenue growth = 37% pa ; gross margins = 82.8% !
• Top dog in AUS, NZ, and UK.
• Watch performance in USA (Intuit fighting back hard), watch to see UK growth and dominance continues.

Nearmap - NEA (ASX) – (5.9%)
• Leading SAAS geospatial service in Australia. Hyper growth in USA.
• First mover.
• 45% revenue growth, and accelerating from low 30s. US growth = 108% pa.
• Watch for disruption from GOOGL, and other competitors.

A2 Milk – A2M (ASX) – (4.3%)
• A2 the only A2 only protein milk producer.
• Capital light model – A2M outsources production.
• High margin for “premium” milk product.
• High growth (+50%) in china, US, and UK.
• Great optionality, with infant formula yet to be released in US and UK markets. Huge growth runway.
• Watch for branding – vulnerable to customer whims, and reputational damage. China regulatory and economic risks could greatly impact A2M.

Pushpay – PPH (ASX) – (4.2%)
• Leading SAAS provider in the faith donations administration sector.
• Top dog - First mover.
• 35% revenue growth. Reached cashflow breakeven.
• Increasing gross margins.
• Watch for slowing growth as management focus on generating cash, stabilizing costs, watch for poor acquisition execution.

Bapcor – BAP (ASX) – (3.4%)
• Top dog in ANZ wholesale vehicle parts. Dealer network provides huge competitive moat.
• Well managed and highly profitable.
• Watch slowing growth and market saturation.
• REDUCING POSTION OVER TIME

Envirosuite – EVS (ASX) – (3.2%)
• Leading SAAS environmental management provider. Customers in water treatment, steelworks, and smart cities.
• HUGE TAM.
• First mover.
• 100% revenue growth.
• Very early phase – burning cash. Watch for need to raise further capital in 2020. Watch for sales execution and onboarding risks.

HUB24 – HUB (ASX) – (2.7%)
• 2nd SAAS investment platform in Australia.
• FUA growth o 45%.
• 35% revenue growth, NPAT growth of 39%.
• Watch for margin compression – it is already happening, and operational leverage is affected.
• REDUCING POSTION OVER TIME

Nanosonics – NAN (ASX) – (2.4%)
• World leader in probe disinfectant technology.
• 36% revenue growth, operating profit up 195% showing strong operational leverage as scale increases.
• Installed base growing about 20 % pa.
• High margin consumables sales growth of 59% (razor blade model in action). Over 50% of revenue.
• New product releases over the next three years to increase TAM.

Audinate – AD8 (ASX) – (1.7%)
• World’s leading AV networking protocol, Dante (converts audio / video to digital signal).
• Sells to OEMs – Dante AV use cases – Sports Bars, conference rooms, classrooms, Courtrooms, retail AV, transport hubs.
• Adoption accelerating – Dante now the leading protocol.
• 51% revenue growth.
• Market penetration – 7=8%.
• Video product to be being released this year to double TAM.
• Cashflow positive.
• Watch for decline in adoption, slowing revenue growth.
• INCREASE POSITON OVER TIME TO 5-6%

Wisetech Global – WTC (ASX) – (1.6%)
• World’s leading SAAS supply chain / logistics platform – CargoWise.
• 68% revenue growth, NPAT up 48% (yes, hyper growth and profitable).
• 38 of the top 50 3rd party logistics providers use Wisetech products.
• 7 of the top 25 freight forwarders use CargoWise. Note: all the top 25 use a Wisetech product. Great expansion opportunity for transitioning all customers to the CargoWise platform.
• Customer attrition <1% pa.
• Existing customer revenue expansion: 127% pa.
• Acquires local logistics businesses to establish geographic foothold, increasing competitive moat.
• Watch for emerging competition, trade disruption.
• INCREASE POSITION OVER TIME TO 7-8%.

Redbubble – RBL (ASX) – (1.4%)
• Global platform for artists and customers. Has a strong network affect.
• 40% revenue growth pa.
• Margins lower than typical SAAS: approx. 37%
• Watch for increased competition, vulnerable to Google search algo changes. Onboarding of recent acquisition.
• DECREASE POSITION OVER TIME TO 0%.

Vista Group – VGL (ASX) – (0.9%)
• Leading Global platform for Cinema software.
• 23% pa revenue growth.
• Global market share: 40%.
• SAAS is 32% of revenue, up from 25%.
• Reliant on growth in US, Asia, South America, and Europe. Canada, Central America, and Aus market saturated. Growth not high enough.
• DECREASE POSITION OVER TIME TO 0%.

Positions sold since January 1, 2019:
I sought to reduce my “de-worsificiation”, and offloaded a number of holdings where the thesis had broken, all were experiencing extreme valuations (BVS).
• Volpara health technologies (VHT) – missed revenue targets, and at extreme valuations (22 time precited earnings – which it missed). Great potential – will continue to watch.
• Mynetfone (MNF) – growth story evaporated due to cut throat competition. Growth engines faultered.
• Hansen technologies (HSN) – organic growth disappeared. Roll up dressed up as a SAAS business.
• Paragon Care (PGC) – Missed target, medical supply company trying to transition to a SAAS. Should stick to its knitting.
• Ellex Medical Lasers – growth thesis broken – New laser products growing well, but legacy product growth fell off a cliff.
• Medadvisor – SAAS company for medication management. Technology iffy, and growth rates declining.
• Bravura Solutions – Forecast growth of high teens, which market applauded, driving PER to 38 on forecast numbers. Sold out – better places for my money.
• Adacel technologies (ADA) – thesis broken on service revenue when competitor pinched client on contract to service its own simulators.
• Citadel group – Sold on nose bleed valuations. Consulting business with a little SAAS. Difficult to scale.
• Trimmed Envirosuite, Nearmap, Altium, Appen a little after strong rallies.

Positions acquired since January 1, 2019, positions I added to include:
• WTC
• EVS
• RBL

Non-US Portfolio percentage = 52.6%
Non-US Portfolio Return since January 1, 2019 = 35%

Do you have suggestions, or feedback? looking forward to your thoughts.

Regards,

Sean

60 Likes

Interesting…

Heard of XERO and Audinate before. Dont know much about them…

I just started use A2 milk… few weeks back i noticed at local Costco… it is priced 50% premium to organic mils (which itself is ~100% premium to regular milk)… one thing I did notice is that my acidity has reduced a lot in last few weeks and have been wondering if this A2 milk has been helping…

Didnt realize its an Aussie public company… should be very profitable.

2 Likes

Hi Sean,

We have conversed a time or two on the MF Australia boards, I believe.

Excellent post and very interesting portfolio. I like almost all of it, but will confine my response to areas where perhaps we differ, or where I would add some emphasis or exclamation points.

I think ALU is a world-beater and fits every definition of a stock of interest to this board. I add to it regularly – in big chunks on downward price spikes.

I also think APT is of similar character, and am surprised to see you do not include it in your portfolio – obviously you are very familiar with it, so I would be interested to know your thinking behind avoiding it. My thinking goes as follows: Of course there are significant risks, but unlike many Australian companies APT seems to have a clear pathway to tremendous US and global market penetration, backed up by great (albeit early) numbers. And recent oversight developments in Australia seem to have reduced some of the largest regulatory risks. Finally, of course, APT’s growth is astonishing – really of a different order than many companies considered here. I swallow hard and buy APT on dips. And, again, it is hard to understand why it is not of greater interest to the members of this board (I don’t care one way or the other – I am not an evangelist for APT). Joe Magyer’s belief in APT buttresses my own analysis, and gives me added confidence that it is a risk well worth taking.

OTOH, I think WTC has a limited growth trajectory – it is, IMO, a good company, but one that may not succeed in carving out a big chunk of the global market against a vigorous group of solid competitors (from small – e.g., KXS in Canada – to the very large, obvious ones). I would (and did) sell WTC.

Similarly, I think A2M is an inferior risk-adjusted proposition. The upside is, IMO, limited by a small TAM and few barriers to entry if the TAM grows, and the risks include all the usual ones for high-growth companies plus (i) dependence on China for the home run proposition, (ii) all the risks of selling food, especially food to be ingested by babies, and (iii) very substantial supply chain/logistics issues in a growth scenario compared to, e.g., software companies (where increasing supply and shipping product is trivial). I spent many years in the organic food business, and am convinced by that experience that early development of a specialty food supply chain is not really much of a moat at all – it is an advantage that is costly to establish and quite ephemeral if larger players decide to enter the fray. I would (and did) sell A2M.

BAP is like the US company APU – great management in a slowly declining business. IMO, this is an inferior proposition to most of those featured on this board – the risk with BAP is high and the likely return is muted in comparison to, e.g., TWLO or ALU. I never have owned BAP for these reasons (and wish I had never owned APU as well!).

Finally, why not PME? It is sort of a better NAN, IMO, albeit at a later, more fully priced stage. I like both NAN and PME, but have trouble pulling dollars away from a TWLO or AYX or ALU or APT to invest in them. It is by no means as bad a comparison as is the case with BAP, but still the risks are pretty high (medical field, supply chain issues), and the potential reward not really any greater than with the good SaaS companies. Also, there is always a risk of government involvement in medical procedures and equipment which is generally not present with many other high growth companies.

Again, there is a selection rule tilting my comments toward the negative and questioning here – overall, I think you have a great portfolio. It would just be a waste of both of our time to say that over and over with more specifics.

Rich

10 Likes

Hi Rich,

Thanks so much for your response. It is great to hear from you! Love your feedback.

I agree with you on ALU, but I think its revenue growth will slow a little over the coming years, albeit with good operational leverage. Happy to hold at current levels.

APT, it is a special one. I have owned it twice, but chickened out. I am afraid of bad debt risk, regulatory risk, and scalability challenges. At the end of the day, APT needs ongoing capital to grow to fund the borrowings. I know I have passed on some stunning growth and a huge pipeline, but I have decided to let it go for the mentioned reasons. Perhaps you could fly first class to Sydney in a few years time to tell me how hard it is to count the money you made on APT.

WTC being threatened by KXS? I think you are dreamin’. KXS is getting smashed by WTC. 63% revenue growth vs 15%. To own the supply chain platform space, you literally have to be everywhere - that is what WTC is doing, acquiring businesses across the globe, and scaling its platform off these acquisitions. It just did a capital raise to further the expansion. In use by the top 25 logistics companies. 7 of them transitioned to Globalwise platform. It also acquired a competitor that will enable it to track every single container, individually, and globally.

A2M, again I beg to differ. A2M has a strong product differentiation, with a unique well being proposition. There is the china risk, but I expect US will ultimately be a larger, more lucrative market or A2M. I see the risk reward as reasonable a this price point, although I would not increase my weighting above current levels. There are competitors emerging like Nestle, but I see this more as confirmation/ validation of the business model, which Nestle cannot emulate, given its legacy A1 protein products. A2M spent nothing building the supply chain - it only owns the IP and marketing. Very capital light model (although it did invest in Synalit recently to secure supplier relationship).

I agree with you on BAP - Its just that I have a bit of selling to get through before its head is on the chopping block.

PME, the one that got away. You had to bring that up. I love PME as a business, but I can’t seem to find an entry point. I agree, it is perhaps a better business than NAN. When I manage to get in, I’ll let you know.

I am now getting worried my US portfolio will outperform. I can’t have that now. :slight_smile:

Many thanks for the great feedback.

2 Likes

Sean - great post and fascinating to see ex US options fitting the Saul like investment opportunity status.

Without wanting you to repeat yourself my comments would have been similar to others involving:
A2Milk - it’s a CPG company with a single brand/category up against i) Giant AgroIndustrial complex and ii) Usually hyper efficient and strong buyer retail trade. I would think Nestle or someone could replicate this and end the party over night and I couldn’t see a TAM justifying much more in valuation (already $10bn).

I held up until January when I sold out with my 35% gain (not the reason for selling) in order to re-direct the funds into AfterPay Touch - the much faster growing much smaller but much larger TAM fintech play.

I think the risk reward for AfterPay has turned the corner. They are ramping US and entering UK whilst still killing it in ANZ. Regulatory track seems ok and their debt risk is under control.

As the US results start to come in this year I can see these guys exploding.

A

3 Likes

I would think Nestle or someone could replicate this …

They already have: https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&…

The other problem with A2 milk (the product more so than the company) is that sooner or later the purveyors of it will need to come up with conclusive scientific evidence of the benefits rather than just hinting at the benefits, or else consumers will tire of paying the exorbitant prices for what is fundamentally just white milk.

What is A2 milk (the product, not the company)? Regular milk has two types of beta-casein protein, denoted A1 and A2. A2 milk only has the A2 protein, since it is obtained from cows with genes that only code for the A2 protein. The claim by purveyors of A2 milk is that it is more easily digested than regular milk, and is just plain healthier all round.

The claim that A2 milk is more easily digested than regular milk is the main selling point, in particular that A2 milk is more suitable for lactose intolerant people. Really? Lactose intolerance is the inability to digest the milk sugar lactose, which is equally present in both regular and A2 milk. And, if one is lactose intolerant, then the proven solution is to drink lactose-free milk. However, digestive problems may be caused by reasons other than lactose intolerance, and perhaps A2 milk might have a stronger claim to benefit there, but that nuance seems to be conveniently ignored in the pursuit of lactose intolerant customers (who are especially prevalent in the lucrative Asian markets).

Details here: https://www.healthline.com/nutrition/a1-vs-a2-milk, where the conclusion is that the evidence is too weak to support claims of benefits of A2 milk. So, why so expensive?

1 Like

Glad to see quite a few Aussies on the board.

Sean, I have a very similar list.

I agree about A2M comments by Anthony and Rich. I sold A2M last year due to the same reasons mentioned above.

Also agree on PME over NAN.

APT is my top holding. TWLO is my US top holding.

Cheers
Will

Thanks Sean for that very useful portfolio summary. I’ll have to look into a couple of the companies I never heard of. But I have to ask, how do you manage to keep track of so many companies? I have trouble staying up to date with a dozen.
Saul

2 Likes

I’d love a deep dive into WiseTech by the way. Looking at press releases on their website I see:

Press Releases
WiseTech Global acquires leading container solutions provider, Containerchain
25 February 2019
Global logistics solutions group, WiseTech Global, today announced the acquisition of Containerchain, a leading container optimisation solutions provider to the container shipping and landside container logistics communities in Asia Pacific, Europe and the United States.
Read more »
WiseTech Global acquires Norwegian customs solutions provider, Systema
31 January 2019
Global logistics solutions group, WiseTech Global, today announced the acquisition of Systema AS, a leading customs management solutions provider in Norway.
Read more »
WiseTech Global acquires Swedish customs and logistics solutions provider, CargoIT
31 October 2018
Global logistics solutions group, WiseTech Global, today announced the acquisition of CargoIT i Skandinavien (‘CargoIT’), a leading customs management and logistics solutions provider in Sweden.
Read more »
WiseTech Global acquires Parcel shipping and LTL TMS solution provider, SmartFreight
17 October 2018
Global logistics solutions group, WiseTech Global, today announced the acquisition of IFS Global Holdings (‘SmartFreight’), a leading parcel and LTL (Less Than Truckload) shipping software provider.
Read more »
WiseTech Global acquires UK logistics management software provider, DataFreight
16 October 2018
WiseTech Global today announced the acquisition of LSI Sigma Software (‘DataFreight’), a leading provider of customs, freight forwarding and warehouse management software solutions in the United Kingdom.
Read more »
WiseTech Global acquires US intermodal trucking TMS provider, Trinium
15 August 2018
WiseTech Global today announced the acquisition of Trinium Technologies, a leading provider of intermodal trucking transportation management systems (TMS) in the United States and Canada.
Read more »
WiseTech Global acquires leading Spanish customs solutions provider, Taric
9 August 2018
WiseTech Global today announced the acquisition of Taric, a leading customs management solutions provider in Spain.
Read more »
WiseTech Global signs distribution agreement with 3Gtms
11 July 2018
WiseTech Global today announced an international distribution agreement with 3Gtms, a multi-modal domestic transportation management system provider.
Read more »
WiseTech Global acquires US parcel shipping TMS provider, Pierbridge
20 June 2018
WiseTech Global today announced the acquisition of Pierbridge, a leading parcel shipping transportation management solution (TMS) provider in the United States.
Read more »
WiseTech Global acquires Canadian customs solutions provider, Fenix
8 June 2018
WiseTech Global today announced the acquisition of Fenix Data Systems, a leading customs management solutions provider in Canada.

I see eighteen acquisitions since June! …Eighteen!!! …Since June!!! I have to ask how much of that revenue growth is by acquisition instead of organic growth, and whether that is their growth strategy, which if it is, I’d have to understand better.

Best,

Saul

11 Likes

Sorry , it was only nine acquisitions. I was misreading it. But nine since June is still enormous. Any thoughts. I’ll have to look into it further.
Saul

1 Like

Saul,

Just be aware that the US ADR and the Aussie stock seem to have diverged significantly. While this may be a function of currency difference, it may also be an artifact of the marketplace:

WTCHF (US version) has a P/E of 117 and a price of $14.20US

WTC (Australian version) has a P/E of 143 and a price of $23.28AUD (or converted at today’s rate = $16.54US)

Assuming its liquid (the chart is not very promising on this https://www.marketwatch.com/investing/stock/wtchf), the US version would be a bargain. That said, if you want to sell the shares you buy, you might have to, say, buy AUD on the Forex at Interactive Brokers and pick them up in Oz.

Jeff

Hello Sean,

Great post!

I find your portfolio rather fascinating, particularly the international focus of it.

I was wondering how you able to locate and identify so many quality growth stocks on the ASX.

I live in Canada and I find it exceedingly difficult to find stocks on the TSX that approach the quality of Saul and others picks.

Shopify is of course the only exception I can think of.

I would love to find some quality high growth companies to invest in with my source currency CAD and save on those blasted exchange fees.

If you have any tips you are willing to share that would be most appreciated.

Thanks again for sharing your portfolio and congrats on your success so far.

Best,

Jake

1 Like

Hi All,

Thank you for your feedback.

It got me thinking:

  1. For all those investing in ANET an NVDA, I think Altium is a superior investment to gain exposure to chip making / development, with recurring SAAS revenue leveraged off chip design & development. It is not cheap though.

  2. Saul, good to see your look at Wistech’s acquisitions. At first blush, it looks like a roll up - there is a strategy here to land and expand acquired customers (it sometimes purchases non-tech clearing houses to gain a foothold in a country). I’ll explain more in a deep dive. I think Wisetech is too expensive on the ASX. High growth SAAS on the ASX are thin on the ground and they tend to have higher valuations than the US. This all occurred as a result of Oracle buying out a local SAAS, Aconex.

  3. Jake, there is no silicon valley in Australia either, but we do have New Zealand, which is a surprisingly innovative country. A lot of my holdings (XRO, A2M, PPH) hail from there. What I am learning is that there is a particular scale of business in Australia that goes unnoticed (<$30 million), until it hits an inflection point. There are some interesting businesses, like Envirosuite, and Readcloud that are relatively cheap, high growth, but obviously higher risk. This is where my local focus will be going forward, with a view to keeping my Non-US portfolio at the performance as my US portfolio.

9 Likes

Someone just sent me an off board email to tell me that he thought Sean’s portfolio post might be inappropriate because some of the stocks in his portfolio had also been MF Australia picks. I was shocked that anyone would think that. Almost all of the stocks we discuss have been MF picks at one time or another. How could they not be.

What is off limits is saying that “ABC was just recommended by MF Australia/Rule Breakers today”, or yesterday, or something like that. It cheats the Motley Fool and it cheats paid subscribers.

There is absolutely nothing wrong with discussing stocks that have been also recommended by the Fool, if you don’t mention that they are a recommendation.

There is even nothing wrong with saying that the Fool recommended something in the past. (ie, for me, “When the Fool recommended Shopify two months in a row in 2016, it really caught my attention and I jumped in.”

Usually mentioning a recommendation that is a couple of months old or more is fair game, as they get discussed on the Fool’s public stock articles, and members have had a good chance to react to the recommendation.

Saul

14 Likes

In support of what Saul just said:

To be honest, I don’t subscribe to TMF’s paid service, nor do I watch financial TV shows. If I mention a stock that happened to also show up on a paid service, c’est la vie. That said, we’re all herede to make a buck. The fact that a well chosen stock also shows up on one of the paid services just shows that great minds might think alike. It is also not uncommon, one would presume, for a selection from TMF’s to underperform (they are allegedly human, after all).

Like a number of others, I have a large proportion of my equity portfolio invested in foreign shares. The specific companies were picked either because they filled a niche in my philosophical portfolio requirement (say commodity companies tied to the world GDP, spewing dividends and adjunctly as a currency play), companies I ran into during my travels (I’ve been to over 90 countries in the past five years) or products which I have personally used and whose companies impressed me (Omron and Danaher are examples).

Anyhow, back to the topic. I would agree that paroting TMF recommendations is not fair to them. OTOH, mentioning symbols which are of immediate interest here as the companies pass the same screen of parameters as the rest of the shares we’re playing with, shouldn’t be excluded simply because the powers that be at the Fool also like them.

Jeff

Someone just sent me an off board email to tell me that he thought Sean’s portfolio post might be inappropriate because some of the stocks in his portfolio had also been MF Australia picks. I was shocked that anyone would think that. Almost all of the stocks we discuss have been MF picks at one time or another. How could they not be.

What is off limits is saying that “ABC was just recommended by MF Australia/Rule Breakers today”, or yesterday, or something like that. It cheats the Motley Fool and it cheats paid subscribers. There is absolutely nothing wrong with discussing stocks that have been also recommended by the Fool, if you don’t mention that they are a recommendation. There is even nothing wrong with saying that the Fool recommended something in the past. (ie, for me, “When the Fool recommended Shopify two months in a row in 2016, it really caught my attention and I jumped in.” Usually mentioning a recommendation that is a couple of months old or more is fair game, as they get discussed on the Fool’s public stock articles, and members have had a good chance to react to the recommendation.
Saul

I checked with the Fool and they agreed with what I wrote above. It’s a non-issue.
Saul

11 Likes